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Q's Coil Pattern Not Necessarily Bullish
By Mike Paulenoff, www.MPTrader.com
It should come as no surprise that the Q's (NASDAQ: QQQQ) have been carving out a coil pattern off of Monday's high at 30.46. Normally, a coil at the top of a potent upmove should be considered bullish, and should resolve to the upside -- in this case in a thrust to new recovery highs projected into the 31.25 area. Normally? For me the fact that the coil started with an up-gap open on Monday am skews the likely resolution because that GAP may well "need" to be filled (29.03-29.44) prior to the expected upleg to 31.25. I am just guessing about that, but my work is warning me to remain 25% long the SDS (UltraShort SPY ETF) at this juncture in our model portfolio, rather than holding a long position in the Q's in anticipation of a thrust to 31.25 sooner than later.
